For crypto projects, the token is the product
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For crypto projects, the token is the product
Building a highly successful cryptocurrency project: leveraging tokens to consistently attract attention and capital, then transforming this liquidity into products that deliver real value to users.
Navigating Web3 tides with focused insightsAuthor: Mark
Translation: TechFlow
There's an old saying in venture capital: "First-time founders focus on the product, while second-time founders focus on distribution." This captures how product builders often expect growth to happen purely through product quality, rather than focusing on building repeatable systems that consistently attract attention and users to their product.
But there’s another factor—one I think many crypto founders overlook—and that’s the token. Crypto founders routinely overestimate the marketing value of their product and underestimate the marketing value of their token. When I say “the token is the product,” I’m not joking. I genuinely believe that for anyone trying to build a valuable company in crypto, your primary objective should be to attract permanent attention and liquidity to your token—meaning, sell it to anyone willing to hold it long-term.
As anyone can see, the dominant use case for blockchains so far has been buying, transferring, and selling tokens. Some applications layer additional steps or metadata onto these interactions, helping users build complex strategies to extract value from the tokens they own. But everything we do in crypto—every hurdle we cross—ultimately serves an interaction initiated by someone purchasing into a token ecosystem.
While a small number of successful crypto projects have achieved broad, lasting software distribution without a token, they are the exception. If you compile a list of crypto products or protocols with over 100,000 monthly active users (MAU), you’ll notice that nearly all either already have a token or have signaled plans to launch one. The crypto market offers higher efficiency and fairness, making it extremely difficult to sustain competitive advantages against new entrants trying to undercut margins.
Take Uniswap as an example: they maintained dominance for years through strong branding and high-quality tech. Even they eventually launched a token, partly in response to competitors like Sushi, which offered users more value through its token than through product features alone. Cases like this are why I believe that, over a long enough time horizon, any successful crypto product that doesn’t launch a token will eventually lose its profits—or be overtaken by a competitor that does launch and build around a token.
This may eventually apply beyond crypto as well, in response to increasingly efficient markets driven by the internet and AI. Notably, this mirrors how airlines operate today—in fact, much of their value now comes from loyalty programs, due to razor-thin operating margins. Delta’s main product isn’t flights anymore—it’s Delta Sky Miles.
Looking back at crypto, history suggests very successful projects can be built by:
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Using tokens to continuously attract attention and capital
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Converting that liquidity into products that deliver real user value
Successful crypto products can be built in this specific order, and the best evidence is Justin Sun and the TRON network. Despite years of criticism over gimmicks, it's hard not to be impressed by TRON’s actual utility (as a major player in stablecoin payments). He has proven exceptionally skilled at attracting liquidity and attention, converting it into a real network that has created value for millions. The facts clearly show that a token can act as a self-fulfilling prophecy of value—where price appreciation can precede value creation itself. This stands in direct contrast to traditional company building and valuation models, which is why crypto remains confusing to those unfamiliar with this new paradigm.
When any asset’s price surges, people pay more attention—that’s true in crypto and every other asset class. Yet crypto assets seem uniquely effective at converting increased attention into foundational, intrinsic value for the underlying network. This is because crypto networks welcome skilled contributors from diverse backgrounds into their communities. Few non-crypto organizations can harness the influx of attention during reflexive price movements. Therefore, when valuing crypto assets, one cannot rely solely on the value the network creates today or will create tomorrow—but must also account for how future liquidity might shape the network’s development trajectory.
People enter this ecosystem to profit from this new business model, which rewards those who can anticipate where liquidity and value creation will flow. The best founders in crypto don’t ignore this reality—they leverage this inherent desire to build valuable networks where every participant profits from the network’s existence.
A classic example is the Helium network, which attracted enough liquidity (via its HNT token) to provide consistent incentives for self-interested strangers to buy mining hardware and start earning real profits. Leveraging token liquidity, they bootstrapped a network of miners large enough to disrupt outdated mobile broadband infrastructure. Coordinating nearly 400,000 users into such a network would have been nearly impossible without deep liquidity, which acts as a useful stopgap during the early volatility typical of multi-sided market development. In this way, Helium’s first and most important product was its token. Without it, no matter how impressive their hardware or software, they could never have attracted or sustained enough attention to challenge large incumbents.
In tokenized products like Helium, the token price acts as a gauge of attention flowing into or out of the ecosystem. When the token price drops, miner liquidity dries up—not only due to changing economics but also because of herd psychology: if I see others leaving, I may leave too.
Thus, attracting liquidity isn’t just important in the early stages—it’s a constant prerequisite for the network’s survival, though it becomes less critical once sufficient local supply and demand are established within the community. Consistently attracting liquidity to your project is no trivial task; the pressure on crypto founding teams resembles the grueling experience of creators on major social platforms—where even taking one wrong day off can catastrophically derail growth.
Yet some crypto founders are both exceptional technologists and degens—they deeply understand attention flows and how best to ride these waves to continuously generate value for their ecosystem. They achieve this by consistently delivering on promises to their community, creating self-reinforcing positive feedback loops, and relentlessly innovating on the product to keep users (token holders) engaged with the project’s long-term vision.
From a practical standpoint, the art of attracting liquidity takes many forms. For most founders, it begins with raising small seed funds from friends and family, followed by larger rounds from institutional investors (explicitly or implicitly promising future tokens), then pre-launch token deals, formal launches, bounty campaigns for token distribution, partnerships with exchanges and market makers to provide liquidity, and various marketing tactics to boost visibility in the crypto attention economy. Crucially, they collaborate with an expanding network of people who believe in their mission and join their community to support it—motivated both by genuine belief in the network and by generous rewards offered by the token to early adopters. Ideally, the people you sell tokens to should be the first to actually use the network, or at least loudly promote it to their audience.
Importantly, they work with an ever-widening network of people who believe in their mission and join their community to help build it—individuals motivated by intrinsic conviction in the network and by a token that richly rewards early participation. In the ideal case, the people you sell tokens to should be the first to truly use the network itself, or at least vocally advocate for it to their audience.
Ultimately, most efforts boil down to selling the token to as many new buyers as possible, while doing everything possible to prevent existing token holders from selling. Sometimes this is done through lockups for staking or investment, sometimes through memes. Either way, the best tokenized communities excel at playing infinite games in adversarial settings—when the token is under pressure, strangers coordinate to keep the game going (e.g., bidding up the token during sell-offs), even though they ultimately compete to exit at higher prices later.
Tokens are an incredibly powerful coordination tool. Over the next decade, we’ll see explosive growth in tokenized networks that will seriously challenge institutions that still hold immense power today. Tokens also allow companies in commoditized markets to accumulate attention and goodwill during competitive periods, helping them preserve moats. This creates enormous opportunities for founders who are technically skilled and creatively driven (in both software and memes), and brave enough to take on large incumbents.
Indeed, this playbook has become so clear and repeatable that utility token networks will continue to attract significant early-stage capital from investors eager to get in early and right on visionary founders. As this market matures, I also expect competition for liquidity and attention to intensify—even more than we’ve already seen in the utility token sector of the blockchain space.
We’re excited about the coming wave of tokenized networks, and believe recent advances in wallets and zk technology, combined with abundant secure blockspace, have created perfect conditions for a whole new set of applications and users to join crypto.
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@MarkBeylin
